Saturday, June 25, 2011

G-20 comes up with an action plan to deal with food prices

On Thursday, the agricultural ministers of the world's 20 largest economies met to deal with surging food prices. While it is encouraging that there was discussion, the action plan they came up with falls short of what many advocates for the poor were hoping for.

The French agriculture minister, Bruno Le Maire, called agreement on a 24-page action plan unveiled in Paris as a "tour de force" and a victory against hunger in the world.

Analysts and campaigners were less enthusiastic at the outcome, which followed two days of talks in the French capital. "The plan of action tries to address the symptoms of price volatility on agricultural markets," said Olivier De Schutter, the UN special rapporteur on the right to food, "but it fails to address the causes."

De Schutter argued that food markets are highly dependent on energy markets, irresponsible mandates to increase the production and use of biofuels, and speculation that cannot be reduced to investors manipulating prices but which is the result of the "financialisation" of the commodities markets.

A key element of the action plan is a call for more transparency in commodity markets linked to an early warning system – an agricultural market information system – that would collect information on stocks, and the supply and demand of crops. Le Maire said India and China, which have been reluctant to provide such information on grounds of national security, would be given more time to come up the data.

The action plan encourages the private sector to come forward with this information, but there is no compulsion on big traders like Cargill and Bunge to release data, and they may be less than forthcoming on grounds of commercial sensitivity.